In a sign of continued turbulence within the teleradiology services industry, teleradiology provider Virtual Radiologic (vRad) has signed a definitive agreement to be acquired by national medical group Mednax for $500 million.
The plan is for vRad's current management to join Mednax as part of the acquisition, which is expected to close in the second quarter. The company's headquarters, operations, and client support center will remain based in Eden Prairie, MN.
Virtual Radiologic has more 350 U.S. board-certified and eligible physicians, 75% of whom are subspecialty trained, interpreting more than 5 million patient studies annually for more than 2,100 client hospital, health system, and radiology group facilities, according to the company.
Virtual Radiologic was one of the early teleradiology providers, and has grown over the years through a series of acquisitions, such as its purchase of Nighthawk Radiology Services in 2010. However, as the firm grew, it also faced a number of competitive pressures, including aggressive price competition and pushback from radiologists who increasingly began to see the firm as a competitor. The company was taken private in mid-2010 by equity firm Providence Equity Partners, which bought the company for $294 million.
In a prepared statement, Jim Burke, vRad CEO, said the transaction allows the company to "move into the next phase of our journey: one of expanded and complementary opportunities for our clients, higher growth, and increased investment in innovation."
Dr. Roger J. Medel, CEO at Mednax, said vRad provides "an excellent platform for growth in teleradiology and the broader telemedicine market," adding that the acquisition of vRad will give Mednax opportunities for growth by cross-selling the companies' products and services.
Mednax provides maternal-fetal, newborn, pediatric subspecialty, and anesthesia physician services through 2,650 physicians in 34 states and Puerto Rico. The company includes Pediatrix Medical Group with neonatal physicians who provide services for more than 370 neonatal intensive care units for maternal-fetal medicine, pediatric cardiology, pediatric critical care, and other subspecialties for clinical care.
Mednax's American Anesthesiology division includes more than 2,400 anesthesiologists and advanced practitioners who provide anesthesia care to patients for surgery and other procedures as well as pain management.
